Image source: Getty Images This law could help you put money aside for your future. Key points The Secure 2.0 Act aims to help everybody save more for their retirement. One provision, called the Saver’s Match, could be of particular use to freelancers. Find out what tax advantaged account would suit your needs best, whatever your work situation. More and more people are self-employed or freelancing these days, which brings many advantages in terms of flexibility and independence. But there are downsides as well. For example, it can be hard to put money aside for your old age. A recent Pew Charitable Trusts survey of nontraditional workers showed that around half of them weren’t confident they’d have a comfortable retirement. That’s partly because the onus is on you, rather than an employer, to organize a retirement plan. Plus, freelancers’ income streams aren’t always regular so it can be hard to juggle your contributions. If those scenarios ring any bells for you, it’s worth knowing you could access federal help, both now and in the future. New law helps everybody build retirement savings, including freelancers The Secure 2.0 Act was signed into law at the end of last year. It’s a broad retirement package that will impact almost every American. The idea is to encourage people to save more for their old age. One aspect of the new law, called the Saver’s Match, could make a big difference to freelancer workers. The match replaces the current Saver’s Credit and won’t come into effect until 2027. But when it does, the government will make a 50% match on up to $2,000 of the money you contribute to your retirement account. That means lower-income freelancers could get a boost of up to $1,000 toward their retirement each year. The match starts to phase out once you reach a certain income level. For example, joint filers who earn $41,000 or less can receive the full match while those who earn up to $71,000 will only get some money. Here are the phased income brackets for the Saver’s Match: Between $20,500 and $35,500 for single taxpayers and married filing separately Between $30,750 and $53,250 for head of household filers Between $41,000 and $71,000 for joint filers The government will match contributions made to individual retirement accounts (IRAs) and ABLE accounts. If you aren’t freelancing, the Saver’s Match also applies to employer retirement plans. It’s important to note that the money will be deposited directly into your retirement account, it won’t take the form of a tax credit. Start planning for retirement today You don’t have to wait until 2027 to start building your retirement savings. The temptation to put it off is understandable, especially as retirement savings often fall into the “important, but not urgent” category. Unfortunately, whether it’s figuring out your health insurance to planning your retirement, your employer won’t do it for you. Plus, the earlier you start saving for your retirement, the better. The power of compound interest means that even […]
